Akerson's goal: Faster, leaner, smarter

[DOCTOR]

To fix GM, he's tackling IT, accounting mess

Read more: http://www.autonews.com

DETROIT -- General Motors CEO Dan Akerson envisions a day when GM will be able to check instantly the profitability of every vehicle it sells.

That, Akerson believes, would enable GM to pinpoint the product lines and countries that contribute most to the bottom line, leading to faster and better decisions. It also would let GM more precisely track each business unit's results and hold its leaders accountable.

"As we see this organization evolve, we will have people with global responsibilities for certain functions that have profit and loss from top to bottom," Akerson told Automotive News.

That's not how GM operates today.

The effort shows two ways that Akerson, 64, is putting his stamp on GM in his third year steering the automaker:

1. He wants to "create a culture of accountability" and eradicate the complacency that has festered inside GM for decades.

2. He wants to simplify a bureaucratic and fractured corporate setup that can obscure the true profit picture and leave business units competing against one another, to the detriment of the company as a whole.

Standing in his way, though, is lingering dysfunction in GM's accounting, information technology, human resources, legal and other back-office operations. That has made it impossible to track closely the company's financial performance across its divisions.

Akerson is attacking that problem in part with an overhaul of GM's IT operation. The company is hiring up to 10,000 IT employees and opening software and data centers so it can regain control of its IT infrastructure. Currently, outside providers handle 90 percent of GM's IT work. GM wants to flip that ratio.

The overhaul will reverse what Akerson regards as one of the key strategic blunders GM made in recent decades: buying IT provider EDS in 1984 and spinning it off 12 years later. EDS later was acquired by Hewlett-Packard Co., which, along with other providers, has continued to handle GM's IT needs.

He equated the outsourcing to "the U.S. military hiring another country to be the U.S. Marine force."

"It was like the management of this company saying, 'That's IT. Let those guys handle it. We're car guys,'" Akerson said. "No, you're not. You're car guys who need IT to gain competitive advantage."

In tackling GM's legacy problems, Akerson embraces the role of steely-eyed outsider who can apply practices from outside the automotive world to fix things. He has been criticized for not being an automotive insider, let alone a "car guy." He's OK with that.

"We need to fix some fundamentals here, and we are," he said. "That will make us a much better competitor in ways that the car guys never could have imagined."

Akerson is relying on many outsiders to make those changes. For IT, he recruited Randy Mott, a former Hewlett-Packard executive who previously helped Wal-Mart Stores Inc. build an in-house IT system to analyze customer buying trends.

On infotainment, Akerson said GM can lead the industry in part because of a string of recent executive recruits "from the tech side of the world" that he believes gives GM a competitive edge. Among them: former execs from Dell Inc., Sony Corp. and Alcatel-Lucent, which includes the former Bell Labs.

"If you would've brought somebody from Apple here five years ago, this whole industry would be radically different in this area of infotainment," Akerson said.

GM's outsourced IT setup left it without strategic control of its data and created a splintered, costly system, Akerson said. GM now outsources its IT to 23 data centers, which Akerson said is akin to a view that "every car needs six wheels." He plans to consolidate that to two GM data centers.

The IT overhaul is the latest front in Akerson's battle to simplify GM's structure and cut costs. In marketing, GM this year consolidated its roster of outside media-buying firms and Chevrolet creative-advertising agencies from more than 100 to just two, which GM believes will save $2 billion over five years.

GM is streamlining product development by building more vehicles on fewer platforms and eliminating executive-level engineering positions that insiders say bogged down development.

[uvikrama]

Fast - Ok, got it, more SS kind of cars ( ZLI, SS, Corevette ) ..
leaner - More muscle cars ( i see that , ex: 2010 Camaro grill on all products - 2014 impala, Travese)
smart - Is this mean more cars on smart two size - more small cars ( i see that also - Sonic ,spark )

So the goal achieved is when Chevrolet Spark comes with a Camaro Grill and having a 6.2L LSA engine on it ???


let me put the sarcasm aside :

If company takes 2 years for addressing the falling sales of Malibu ( which is a bread and butter segment in US ) , How these words are applicable ? .

Look at Honda , 2012 faced the negative reviews and they have a new model for 2013 ( even their sales were not affected by these reviews ) . 2012 Civic was not a bad car or sales were not doomed because of the reviews.

Every management person says "Agile ", stay slim, execute fast and do Smart ( here smart is http://en.wikipedia.org/wiki/SMART_criteria ) things . The question is how he implements.

Show it in Practice than preaching ... Show me a Market winning Malibu in an year addressing the negative feedback and show it has a place in top 3 midzsize sedans sales and still sells on profit. If i see this, i will agree "Akerson is the man " till that time - "Just blabbering "

[mchicha]

This Arkerson guy seems to know what he is doing, but he is washing dirty under clothes in public. He Just told everyone and their mother where his competitive advantage is.

[Ronald McChevy]

This Arkerson guy seems to know what he is doing, but he is washing dirty under clothes in public. He Just told everyone and their mother where his competitive advantage is.

I wouldn't say it was a secret before Dan talked about it.

[mjd1001]

The problem is why is that not happening already, and if it isn't why can't you start doing it almost immediatly.

GM is a multion billion dollar company. They ahve been around for years. The technology is here (and has been) to get at least 90% to their goal if not 100%. Worse yet, the fact that GM is annoucing it....it reminds of of what they have done in the past with their car technology....engineering by press release. How about just doing it and doing it now..and don't tell people that you are going to make it your goal to do it in the future?

[FanOfDurant]

"IT".. "Accounting".. blah. Where's the Product? I don't often knock Dan but this is a joke. The entire structure of the company could be in shambles but if the product was there that folks wanted to buy, it would matter very little. You could fix that other stuff behind the scenes. You make your money by selling vehicles people want. I also see he essentially wants to run "General" Motors more like a Specific 1-2 brand company. I applaud that. The problem is, he's working at the wrong place. General Motors is brands, brands and more brands... The Holding Company that we once called GM is now The company with nothing but a collection of meaningless soulless nameplates. If he wants to fix anything, he should fix that.

[nsap]

More lip service.

If his IT and accounting "fixes" are on par with sales/marketing, we're not talking about much of a fix here.

[Tico]

Viewing IT not as overhead but something that enables and empowers innovation is a realization the is sweeping the business world. . Up to the minute data about every part of you business, known as business intelligence is something all companies will need to survive in the near future. Having IT in house allows them to work closely with each business unit to provide tools and data that actually help the business grow not just fill a required service. I can't believe in 2012 Gm is not already doing this. World class internal IT is the only way to survive in the teens. Take it from a car guy who is an IT guy too.

[vcs2600]

Having worked at an "EDS shop", I can only say this sounds like a very good move.

[ne_one]

"IT".. "Accounting".. blah. Where's the Product? I don't often knock Dan but this is a joke. The entire structure of the company could be in shambles but if the product was there that folks wanted to buy, it would matter very little. You could fix that other stuff behind the scenes.

Subtly-veiled sarcasm right?

The "other stuff behind the scenes" is what sustains every facet of the business. What happens when you get a systematic breakdown? A few thousand Sonics ship with part of their brake assemblies missing and nobody can find a $50k Cadillac that was ordered 2 months ago.

[germeezy1]

Why can't GM ever shut their quite wide open pie hole on what they plan to do years before they do it? Toyota is under a periood of change as well in many ways but other than PR lead interviews with Akio Toyoda there are no indicications from them as to what exactly they plan to do moving forward. Yes it is not exactly news that GM needs to fix the whole operations side of the business but why would they not at least talk about it internally.

[crm2019]

Wait, I thought they made accountability a priority when Whitacre was CEO. No?

I won't hold my breath for this. From my perspective, I still see far too much Old GM that's alive, and thriving.


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[plane]

Not even close.
It's going to take him 50 years to live down the total cluster**** that he turned the Malibu into.

Yeah, you want to win people back? Make a class-leading midsize sedan you ****ing asshat.

sigh

[kevinahcc20]

Why can't GM ever shut their quite wide open pie hole on what they plan to do years before they do it? Toyota is under a periood of change as well in many ways but other than PR lead interviews with Akio Toyoda there are no indicications from them as to what exactly they plan to do moving forward. Yes it is not exactly news that GM needs to fix the whole operations side of the business but why would they not at least talk about it internally.

Lt. Dan can't shut his pie hole because it's all about him! He's happy to tell anyone who will listen that he has all the answers, the auto business is a piece of cake, all who preceded him were dolts, the car guys (who have kept the company afloat) are overrated, and anybody can do any of these jobs. Need a new head of Product Development...how about Mary who managed a plant and headed HR? Need a new Cadillac Global Manager...how about Bob who ran a telecom and Public Relations? Need a new head of Global Marketing...how about Joel who had the right background and lasted two years? I suppose it's no surprise that the guy who got to be CEO of GM by accident and despite his substantial lack of qualifications would think that qualifications were overrated. (Steps down from soapbox)

[zete]

I've never understood why firms outsource IT. It's an idiot move. I've worked at companies that have outsourced their IT to their competitors. It's unbelievable how many stupid things have been done.

IT is a critical resource in a firm. It allows one to quickly do the things that need doing. It provides a communications infrastructure to allow people to communicate, collaborate, and safeguard their IP.

That said, hiring 10,000 people and getting that all re-integrated is going to be a helluva job! There are going to be mistakes and missteps, but at least he is doing what is right.